Are you planning to make your first gold investment but not sure how? Beyond the basic physical investment options, gold investment comes in various forms, including IRAs, stocks in mining companies, mutual funds, and physical-backed ETFs.
Hence, it’s important to be familiar with the different options and key investment considerations to make the most of this valuable asset.
To help you with that, this article will discuss all things related to gold investment for beginners. So, without any delay, let’s dive in!
Understanding the Basics of Gold Investment
For millennia, gold has been regarded as a wise investment. In fact, when the Bretton Woods system ended in 1971, gold as an investment became extremely popular.
That said, the price of gold has continuously risen since the 1970s. From being priced at $35 per ounce in 1970 to approximately $2,000 per ounce by August 2011, gold's value has seen tremendous growth over the decades.
This historical growth demonstrates that gold is a dependable investment option that can preserve the worth of your capital for decades.
Benefits of Investing in Gold
With gold being an all-time popular investment option, holding this yellow metal brings various benefits. These include:
Options for Investing in Gold
To make the most of gold’s benefits, it’s important to understand the different gold investment options and opt for one that best meets your preferences. Some such options include:
Purchasing gold bars and coins from a bank or reputable dealer is one of the simplest methods to obtain gold as an investment. Some reports show that small bars and coins accounted for over two-thirds of yearly gold investment demand and around one-quarter of worldwide gold demand over the last decade.
Gold Stocks in Mining Companies
Stock purchases in gold mining companies allow you to earn from gold through the company's profits. But, it’s important to remember that the stock's growth and return depend on the company's predicted future earnings, not merely the value of gold.
Physically Backed Gold ETFs
A physically-backed gold ETF, or Exchange-Traded Fund, allows you to invest in several types and sizes of gold bullion in a single ETF. This includes gold bars, coins, and so on. This allows you to invest in various gold assets under a single physically-backed gold ETF.
A Gold IRA is an individual retirement account (IRA) in which you can keep physical gold and other precious metals. It is a popular retirement investment choice with numerous tax advantages. But it’s important to remember that only IRS-approved gold qualifies for precious metals IRA investments.
Key Factors to Consider Before Investing in Gold
Other than the different gold investment options, it’s also important to consider the following factors to make an ideal investment decision:
Steps to Start Investing in Gold
Not sure how to invest in gold the right way? Consider the following steps:
Common Mistakes to Avoid for New Gold Investors
Besides the key considerations, it’s also important for beginners to avoid certain investment mistakes, including:
Gold is an unquestionably valuable addition to any investing portfolio. However, it is always critical to determine which sort of investment best meets your objectives while considering essential investment concerns.
Ultimately, if you're just starting in the gold investment industry, it is always better to start small and learn as you grow in the investment journey. To get started, have a look at this article on the best precious metal companies, where you can start investing in gold.